TIDMIDE
RNS Number : 6002P
IDE Group Holdings PLC
30 May 2018
IDE Group Holdings Plc
("IDE Group" or the "Company")
Issue of Loan Notes, Settlement of Trademark Infringement
claim,
Board Changes
and
Appointment of Financial Adviser
IDE Group Holdings plc ("IDE Group", the "Group" or the
"Company"), the mid-market network, cloud and IT Managed Services
provider, announces that it has raised GBP2 million by the issue of
loan notes. The Company also announces settlement of its trademark
infringement claim from Coreix Limited, certain changes to the
board of directors (the "Board") and the appointment of a financial
adviser.
Issue of Loan Notes
Further to the announcement on 23 May 2018, the Company
announces today that it has agreed terms for funding for GBP2.0
million by way of the issue of loan notes (the "Loan Notes") to two
substantial shareholders of the Company, Kestrel Partners LLP and
MXC Capital Limited ("MXC Capital"), and Salvators Lending Ltd (the
"Loan Note Holders"). Salvators Lending Ltd is beneficially held
and controlled by Bill Dobbie, the Interim Non-Executive Chairman
and an 8.8 per cent. shareholder of the Company.
The Loan Notes are unsecured and have a three-year term with an
annual coupon of 10 per cent. payable annually, alongside an
arrangement fee of 1.5 per cent., payable on the first anniversary
of the issue of the Loan Notes.
The proceeds from the issue of the Loan Notes will support the
Company's foreseeable working capital needs during the ongoing
strategic and operational review which is expected to complete
during the third quarter of the year.
Details of Subscription
The Loan Note Holders have agreed to subscribe for unsecured
loan notes in the following amounts:
Loan Note Holders and Related Subscription
Parties
Kestrel Partners LLP GBP750,000
MXC Capital GBP750,000
Salvators Lending Ltd GBP500,000
Related party transaction
As each of Kestrel Partners LLP and MXC Capital are substantial
shareholders of the Company, and Salvators Lending Ltd is
beneficially held and controlled by Bill Dobbie, the Interim
Non-Executive Chairman, each of the Loan Note Holders is deemed to
be a related party pursuant to the AIM Rules for Companies (the
"AIM Rules"). The issue of the Loan Notes to the Loan Note Holders
is therefore a related party transaction for the purposes of Rule
13 of the AIM Rules. The independent director of IDE Group,
Katherine Ward, considers, having consulted with the Company's
nominated adviser, N+1 Singer, that the terms of the related party
transaction are fair and reasonable insofar as the shareholders of
the Company are concerned.
The independent director considers that a fundraising by way of
the issue of the Loan Notes is the most appropriate route for the
Company to raise the capital it needs in the timescale
available.
Settlement of Trademark Infringement claim
Further to the announcement on 7 February 2018, the Company has
now reached a full and final settlement of the claim from Coreix
Limited. Under the terms of the settlement, the Company will pay
damages of GBP250,000 over the course of 10 months, plus costs of
GBP3,000 relating to a recent court hearing. The Company apologises
unreservedly to Coreix Limited for the period of infringement of
the Coreix trade mark.
The agreement is conditional upon the parties agreeing, and the
Court approving, the terms of a formal Court Order which is
expected to be considered by the Intellectual Property Enterprise
Court.
Board Changes
The Company also announces that Ian Smith has joined the Board
with immediate effect in a part time executive capacity to lead the
Group's strategic and operational review. Julian Phipps has stepped
down from the Board with immediate effect.
Ian has an extensive track record of investing in and managing
technology companies and is co-founder and CEO of MXC Capital. Ian
has sat on numerous boards and either led or been involved in a
large number of transactions in the TMT sector. Ian led strategic
change and value accretion at Redstone plc and Accumuli plc and was
previously deputy executive chairman and CEO at Castleton
Technology plc.
Mr Smith holds no direct beneficial interest in IDE Group,
however is CEO and a substantial shareholder of MXC Capital which
has an interest in 43,960,000 ordinary shares in the Company,
representing approximately 21.90 per cent. of the Company's issued
share capital.
Appointment of Financial Adviser
The Company also announces that it has appointed MXC Capital
Markets LLP, a subsidiary of MXC Capital, as financial adviser. The
material terms of this engagement include a transaction fee equal
to 2.5% of the enterprise value of any relevant corporate
transaction concluded by the Company, plus an annual retainer of
GBP30,000.
Bill Dobbie, Interim Non-Executive Chairman of IDE Group,
commented:
"Whilst the situation that IDE finds itself in is disappointing,
I am pleased to be able to support the Company alongside other
shareholders whilst it undergoes a strategic review. Despite the
poor cash performance of the business, we believe that there is
marketable value in the underlying business activities and the
focus will be on restoring shareholder value."
IDE Group Holdings Plc
Bill Dobbie, Non-Executive Tel: +44 (0)344 874
Director 1000
N+1 Singer
Nominated Adviser and Broker Tel: +44 (0)20 7496
Jen Boorer 3000
MXC Capital Markets LLP
Financial Adviser Tel: +44 20 7965 8149
Charlotte Stranner
Alma PR Tel: +44 20 8004 4218
Rebecca Sanders-Hewett
Robyn Fisher
Andrew Ian ("Ian") Smith, aged 54, currently holds or has held
the following directorships and partnerships in the last five
years:
AIM Disclosure
Current
MXC Capital Limited
MXC Guernsey Limited
Fort George Capital Limited
Unitranche Ltd
MXLG Acquisitions Limited
Mathian (Newco) LLP
Previous
Mantin Capital Limited
Fastnet Systems plc
Dialnet plc
MXC Capital Finance Limited
Mathian (CM) Limited
Mathain (Newco) LLLP
MXC Capital Listco Plc
Castleton Software Solutions Ltd
Castleton Managed Services Ltd
Castleton Technology Intermediate Holding Company Limited
Castleton Technology Holdings Ltd
Castleton Technology plc
Kypera Holdings Limited
Kypera Limited
Hometeam.Net Limited
Castleton Financial Modelling Solutions Ltd
Impact Applications Limited
MXC Holdings Limited
365 Agile Limited
Montal Group Limited
Montal Computer Systems Limited
Redcentric plc
MXC Capital (UK) Limited
Redstone Converged Solutions Limited
Fujin Systems Limited
Ian Smith was a director of Decorum Networks Limited which was
dissolved on 30 August 2007 with a deficiency to creditors of
GBP619,305.
Ian Smith was also director of Broadblue Catamarans Limited
which is in liquidation and Broadblue Catamarans Sales Limited
which was dissolved on 5 August 2009.
The aggregate deficiency to members and unsecured creditors of
both companies was estimated at GBP612,593.
There is no other information that is required to be disclosed
pursuant to Schedule 2 paragraph (g) or Rule 17 of the AIM Rules
for Companies.
Market Abuse Regulation
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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